Why location matters in compensation lawsuits

Lawyer claims former firm owed him bonuses in connection with over 20 cases

Why location matters in compensation lawsuits

The location where a former employee filed a lawsuit had little relationship to his compensation arrangement with the employer, the contract’s formation, its performance, or its breach, the Texas Court of Appeals said in a recent case.

The plaintiff was employed as an associate at Domingo Garcia’s law office in Dallas County, which was the principal office from which the firm operated. He worked there for almost 10 years and mostly handled cases valued between $30,000 and $50,000.

While working at the defendant law office, the plaintiff received a salary and a monthly bonus in line with a formula, which provided that, if an attorney recovered $30,000 in fees for that month, he would get a bonus of $1,000 plus 10 percent of any attorney’s fees over $30,000.

In November 2018, the defendant terminated the plaintiff’s employment for a reason allegedly related to the quality of his work. He sued for breach of contract and quantum meruit at a court in Tarrant County. He alleged that his former employer owed him bonus payments on 21 cases.

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One of these cases settled for $9.5 million in November 2018, the same month as the plaintiff’s termination. He alleged that he helped the case become ready for settlement. The defendant argued that it removed him from this case in late 2017 or early 2018.

Before trial, the defendant filed a motion to transfer the venue of the case from Tarrant County to Dallas County, where the contract arose and where the alleged breach occurred. The trial court denied the motion.

Bonuses owed for 20 cases

The trial court refused to let the plaintiff recover the bonus relating to the $9.5-million settlement, but found that the defendant breached its contract regarding bonuses on the 20 other cases, and granted the plaintiff attorney’s fees.

The defendant appealed. It challenged the denial of its motion to transfer the venue.

In response, the plaintiff argued that the venue should be Tarrant County because much of the alleged bonus owed by the defendant was related to the prosecution of a case pending in Tarrant County and because a large portion of the work for that case happened in that county.

In the case of The Law Offices of Domingo A. Garcia, P.C. v. David Trosman, the Court of Appeals for the Seventh District of Texas at Amarillo reversed the judgment of the trial court. The appellate court directed the trial court to grant the defendant’s motion to transfer the venue to Dallas County.

Under section 15.002 of the Texas Civil Practice and Remedies Code, a plaintiff should bring their lawsuit in the county where all or a substantial part of the events or omissions giving rise to the plaintiff’s claim occurred.

Section 15.002(a)(1) of the Code states that the court, in deciding whether a substantial part of the events giving rise to the claim occurred in a particular county, should look at the relationship between the events and the claim.

Here, the plaintiff’s claims for contractual breach and quantum meruit involved the defendant’s alleged failure to comply with its compensation structure. Thus, the heart of the dispute concerned the defendant’s alleged failure to pay the plaintiff under their agreement, the appellate court held.

The elements of the plaintiff’s claims – namely, the compensation arrangement, its formation, its performance, and its breach – occurred in Dallas County, the appellate court said.

The plaintiff failed to prove that the events giving rise to his claim happened in Tarrant County or that the allegedly breached compensation agreement was formed or performable in that county, the appellate court added.

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